1. As we learned thus far, the capitalist class consists of people who own wealth, as well as the means of production in American society. An important question in understanding how this class works is to ask: how does a capitalist remain wealthy? The answer to this question depends largely on understanding the diagram M-C-M’. So, let’s practice by explaining what happens in this diagram in our own words (but basing our ideas on Reading 5.1). Respond to the following question: Explain M-C-M’ to show how capitalists maintain and increase their wealth. (hint: your answer should weave a summary that includes what you reviewed in the self-assessment exercise question 1-7)

3 thoughts on “Discussion Board 5.2”

  1. Before the advent of capitalism, peasants and artisans would go to the market and exchange commodities, which were the products of their labor, for money. They would then use the money to acquire various articles needed for personal consumption. For example, a peasant might sell vegetables and buy cloth, while an artisan weaver would do the opposite. This process was known as small-scale commodity production, expressed as Commodity (C) – Money (M) – Commodity (C). The value of the commodity in the last stage was the same as in the first stage.

    However, with the rise of capitalism, a new actor emerged, a person who held money, or capital, and undertook exchanges as a profession. This capitalist would acquire commodities not for personal consumption but for resale, aiming to buy in order to sell. The movement of exchange became Money (M) – Commodity (C) – Money (M’), where M’ is greater than M, representing surplus value or profit. Capitalists realized surplus value by purchasing commodities at less than their value, as artisans preferred to sell to traders rather than waste time finding customers.

    Capitalists could continuously put their money back into circulation, buying to sell and increasing their capital. They eventually transformed into capitalist manufacturers and industrialists, acquiring buildings, machinery, equipment, raw materials, and labor to produce commodities for sale. The process involved starting with money (M), purchasing commodities, and ending with more money (M’). This continuous and unlimited movement of capital involved daily transactions of raw materials, labor, and commodities.

    In conclusion, the capitalist class operates under laws that inherently lead to the appropriation of surplus value from the proletarian. This dynamic highlight’s the nature of capitalism, where the primary goal is to increase capital through continuous buying and selling, ultimately leading to the accumulation of wealth by the capitalist class.

  2. Times have changed , before the advent of capitalism artisan and peasants would have small-scale commodity production meaning C-M-C . The same value that the (C) has in the beginning is the same value it has at the end.At this time the surplus value wasn’t in the picture;it was more about exchanging money for a personal need like food or clothes and vise-versa.

    The difference between Small-scale commodity production (C-M-C) and buying in order to sell(M-C-M’) is the( M’ ) because the value grows meaning the same money that was invested or profit in the beginning has grown.In the other hand (C-M-C) the value stays the same from where it starts .

    Capitalists remain wealthy because they use what is called “we need money to make money” meaning that with a percentage of their surplus value they use it for another investment as buying to sell to keep the money in circulation.(M-C-M’) is mentioned as the general formula of capital because the money that is being used for the commodity or produce is the same money you get after it’s sold but at a bigger rate meaning you get way more money of what you spent to buy the commodity.

    Labor power is basically the mental and physical capability to be a human and when you get a job as a working-class you’re selling your labor power for a wage or salary.Capitalist use the first M to buy the labor power of many workers and also to buy the means of production to help the workers function. C is the result that workers give after selling their labor power in exchange for a wage or salary . M’ or M plus is the final profit that is privately owned by the capitalist .

    Capitalism emphasizes workers exploitation and little to no compassion because if they were to be reasonable towards their workers capitalist wouldn’t have a surplus value or no money left over due to the fact that capitalist also need to pay means of production like materials , machines ,or as simple as paying rent for the location.

    In conclusion, capitalists maintain and increase their wealth by exploiting their workers . Increasing their relative surplus value is what keeps capitalists in business.

  3. Times have changed. Before capitalism emerged, peasants and artisans engaged in small-scale commodity production, following a straightforward exchange pattern: Commodity (C) – Money (M) – Commodity (C). In this system, the value of the commodity at the end of the exchange was equal to its initial value. The primary focus was on fulfilling personal needs—whether food or clothing—without the concept of surplus value being involved.

    With the rise of capitalism, however, a new figure appeared: the capitalist. Unlike peasants and artisans, capitalists held money, or capital, and engaged in exchanges not for personal use but for profit. This shift transformed the exchange dynamic to Money (M) – Commodity (C) – Money (M’), where M’ represents an amount greater than M, signifying the generation of surplus value or profit. The capitalist aims to buy commodities at a lower price, realizing surplus value by selling them at a higher price. Artisans often preferred to sell to traders, saving time and effort in seeking individual customers.

    The continuous reinvestment of money into circulation is what keeps capitalists wealthy. They utilize a portion of their surplus value for further investments, adhering to the principle of “we need money to make money.” The formula M-C-M’ encapsulates the general process of capital: the money invested in commodities returns as a greater sum when sold.

    Labor power, encompassing both mental and physical capabilities, becomes a crucial element in this system. When workers sell their labor power for wages or salaries, capitalists use the initial M to purchase this labor and the means of production necessary for operations. The resulting goods (C) are produced as a consequence of this labor, leading to M’—the final profit that remains in the hands of the capitalist.

    Capitalism inherently emphasizes the exploitation of workers, often lacking compassion. If capitalists were to act reasonably toward their workers, they might reduce their surplus value, jeopardizing their profit margins. Additionally, capitalists must cover costs associated with means of production, such as materials, machinery, and rent.

    In conclusion, capitalists maintain and expand their wealth through the systematic exploitation of labor, constantly seeking to increase their relative surplus value. This relentless pursuit underscores the nature of capitalism, where the primary goal is to continually engage in buying and selling to accumulate wealth.

Leave a Reply